OneSoft Solutions Inc. Reports Q2 2023 Results for Fiscal 2023

Revenue for Q2 and Year to Date Increased 87% and 80%, Net loss reduced by 43% and 41%, respectively, Year over Year

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Edmonton, Alberta, Canada (August 17, 2023) – OneSoft Solutions Inc. (the “Company” or “OneSoft”) (TSX-V: OSS, OTCQB: OSSIF), a North American developer of cloud-based business solutions, announces its financial results for the three and six months ended June 30, 2023.  OneSoft Solutions will host a webcast to discuss the financial results today at 11:00am ET (8:00am PT).  Registration details below.

Please refer to the interim unaudited condensed Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the three and six months ended June 30, 2023 filed on www.sedarplus.ca for more information.  Unless otherwise specified, all dollar amounts are denominated in Canadian dollars.

FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS

• Revenue in Q2 Fiscal 2023 was $2.5 million, an increase of 87% or $1.2 million over Q2 Fiscal 2022 revenue of $1.3 million.  
• Annual recurring revenue increased quarter over quarter by $733,051 or 59% due to greater CIM use by existing customers and the inclusion of IM Operations software maintenance revenue.
• Gross profit increased 109% to $1.9 million in Q2 2023 from $0.9 million in Q2 2022.  

• Gross profit as a percentage of sales was 75.9% in Q2 2023, an improvement over the 68.0% gross profit percentage reported in Q1 2022.  
• The net loss was $0.6 million in Q2 2023, an improvement from Q2 2022’s loss of $1.0 million.  
• Adjusted EBITDA, a Non-GAAP measure reconciled to the net loss in the MD&A filed on SEDAR+, improved from a loss of $0.7 million in Q2 2022 to a loss of $0.2 million in Q2 2023.  
• Liquid assets increased by $1.0 million to total $5.7 million at June 30, 2023 ($4.7 million as at December 31, 2022), comprised of cash and cash equivalents of $5.0 million and accounts receivable of $0.7 million.  

Quarterly Revenue

The chart below shows revenue for the past twenty-eight quarters (7 years), equating to a compounded annual growth rate of 73.8%. Quarterly revenue increased as a result of the expanded use of CIM by existing customers, continued addition of new customers, and the acquisition of IM Operations’ customers acquired June 30, 2022. Management’s objective is to continue to increase revenues to drive cash flow and profitability which we believe will increase future Company value for shareholders.

REVIEW OF FISCAL 2023 GUIDANCE

Further to the Company’s Fiscal 2023 guidance stated in a news release issued on January 24, 2023, the Company advises its progress for the first six months of Fiscal 2023 is as follows.

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• Revenue was $4.7 million in H1 2023 and Management is not changing its revenue guidance for forecasted 2023 revenue at this time.  
• Management reiterates its gross profit guidance of $7.6 million in Fiscal 2023 as forecasted.  
• The Company plans to increase its development staff, which will increase previously forecasted expenses in the second half of Fiscal 2023 and may negatively impact the forecasted Net Loss and Adjusted EBITDA figures. Please refer to the Business Update section in the Q2 2023 MD&A filed at SEDAR for details in this regard.
• The following table states forecasted cash and deferred revenue balances as at December 31, 2023 and actual values as at June 30, 2023. Management believes the Fiscal 2023 forecasted figures will be achieved.  

CIM Use and Revenue Generating Data-Miles

The following table estimates the miles of customers’ pipelines operated, miles that are subject to multi-year SaaS agreements and miles of pipeline data ingested into CIM for which revenue was earned (“data-miles”).  

BUSINESS UPDATE

Fiscal 2023 Business Plan Pivot

Dialogue with existing customers and sales activities with certain North American and international pipeline companies continues to expose new opportunities for the Company to develop additional functionality and products that can potentially drive new sales and increase future revenues. The Company’s Management and Board of Directors met for strategic planning sessions during Q2 2023 to explore alternatives to: (a) identify and assess revenue growth opportunities; (b) ensure the Company continues to retain its technological leadership; and (c) strengthen its competitive moat. Certain decisions made at these sessions will alter part of the business plan that was considered to estimate the January 24, 2023 guidance. Management believes functionality enhancements and additions continue to build and strengthen our competitive moat, encourage customer loyalty and contribute to customer “stickiness”.  We believe that providing the full complement of SaaS functionality requested by customers will preclude our customers from engaging with potentially competitive software vendors. Accordingly, a decision was made to increase technology and product development resources, which will result in increased expenses in Fiscal 2023 and potentially increased net loss and EBITDA deficit, depending upon the volume of new sales that will be completed in the last half of 2023.  

Management believes that the Company has sufficient cash on hand to fund additional product development and that this change to the Fiscal 2023 business plan will result in reducing the lead time for revenue from new products that are currently being developed.  

BUSINESS OUTLOOK  

Management is pleased that the first six months of Fiscal 2023 2023 has progressed in accordance with expectations and is optimistic that the second half of Fiscal 2023 will continue to evolve as planned. We believe that sales and revenue growth will continue into the foreseeable future based on three relevant factors:  (a) the Company’s solutions are continually receiving stronger validation as CIM use increases and user experiences are shared amongst industry participants; (b) our pipeline of prospective customers continues to grow; and (c) our competitive moat continues to grow, evidenced by the fact that we do not encounter any solutions that are competitive with CIM capabilities in our sales activities, other than legacy third party products or software applications that have been developed for internal use by some of the larger pipeline companies. We are encouraged that our customer base and pipeline miles under CIM use continues to increase and that some large pipeline operators, such as our latest customer addition, have chosen to use CIM rather than continue to pursue in-house software development.  

Sales efforts are currently underway with prospective customers in North and South America and Australia and several customers have initiated efforts to expand use of our solutions to their international operating divisions and acquired operations. OneSoft is poised to achieve approximately 50% revenue growth in Fiscal 2023 over Fiscal 2022. With a strong balance sheet, sufficient cash on hand, a strong base of hallmark customers who generate recurring revenues and the ongoing sales activities, we believe there will be no requirement to raise additional capital to execute current business and operational plans.  

Q2 2023 EARNINGS WEBCAST / CONFERENCE CALL

OneSoft’s CEO Dwayne Kushniruk, President & COO Brandon Taylor and CFO Paul Johnston will host a live webcast on Thursday, August 17, 2023 at 11:00am ET to review the results, provide Company updates, and answer investor questions following the presentation.  Webcast / Conference call details are as follows:

DATE: Thursday, August 17, 2023

TIME:       11:00am ET (8:00am PT)

WEBCAST: Webcast Link

OPTIONAL PARTICIPANT TELEPHONE NUMBERS:

• CANADA/ USA: 1-800-319-4610 (TOLL-FREE)
• International Toll-Free 1-604-638-5340 (TOLL)

Callers should dial in 5 – 10 min prior to the scheduled start time and simply ask to join the OneSoft Solutions call.

REPLAY:                 Available at: https://www.onesoft.ca/

About OneSoft and OneBridge

OneSoft has developed software technology and products that have capability to transition legacy, on-premises licensed software applications to operate on the Microsoft Azure Cloud Platform. Our business strategy is to seek opportunities to incorporate Data Science and Machine Learning (a component of Artificial Intelligence), business intelligence and predictive analytics to create cost-efficient, subscription-based software-as-a-service solutions. Visit www.onesoft.ca for more information.

OneSoft's wholly owned subsidiaries, OneBridge Solutions develops and markets revolutionary new SaaS solutions that use advanced Data Sciences and Machine Learning to analyze big data using predictive analytics to assist Oil & Gas pipeline operators to predict pipeline failures and thereby save lives, protect the environment, reduce operational costs, and address regulatory compliance requirements. Visit www.onebridgesolutions.com for more information.

For more information, please contact.

OneSoft Solutions Inc.

Dwayne Kushniruk, CEO

dkushniruk@onesoft.ca

587-416-6787

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Sean Peasgood, Investor Relations

Sean@SophicCapital.com  

647-494-7710

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Forward-looking Statements

This news release contains forward-looking statements relating to the future operations and profitability of OneSoft Solutions Inc. (the “Company”) and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expects”, “believe”, “will”, “intends”, “plans” and similar expressions. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking information is provided to deliver information about management's current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.

In respect of the forward-looking information and statements the Company has placed reliance on certain assumptions that it believes are reasonable at this time, including expectations and assumptions concerning, among other things: the impact of Covid-19 on the business operations of the Company and its current and prospective customers; the availability and cost of labor and services; the efficacy of its software; our interpretation based on various industry information sources regarding the total miles of pipeline in the USA and globally and which segments are piggable; our understanding of metrics, activities and costs regarding evaluation, inspection and maintenance is in alignment with various industry information sources and is reasonably accurate; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; that there are no unforeseen material development or other costs related to current growth projects or current operations; the success of growth projects; future operating costs; interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; the sufficiency of budgeted capital expenditures in carrying out planned activities; and no changes in applicable tax laws. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Since forward-looking information addresses future events and conditions, such information by its very nature involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to many factors and risks. These include but are not limited to the risks associated with the industries in which the Company operates in general such as: costs and expenses; interest rate and exchange rate fluctuations; competition; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws.

Readers are cautioned that the foregoing list of factors is not exhaustive. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether because of new information, future events or otherwise, except as expressly required by Canadian securities law.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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